Thread by @ugodre

Hello everyone, welcome to @Nairametrics Corporate News Roundup for the week ended November 24th, 2018.

This thread is BTU by @BluechipTechNG

Thread starts here

As usual, kindly retweet the first tweet on this thread so that others on your timeline can follow the conversation. It's a loaded edition so be patient and stick with us as we serve you with some of the most important news in corporate Nigeria.

Just in case, the first tweet of this thread is always be pinned to my profile and that of @Nairametrics.

Our Newsletter subscribers will also get a version in their mailbox along with other insightful newsletters shared by Nairametrics.

We begin...

1/ Last week, the National Lottery Regulatory Commission (NLRC) sealed the Lagos and Abuja offices of Nigeria Breweries Plc. The commission explained that it sealed the offices because Nigerian Breweries failed to regularise its promotional lotteries, as required by law.

It claimed that “Nigerian Breweries conducted promotional lotteries valued at about N1.3 billion & had failed to regularise such promo lotteries as required by law, thereby denying the FG of over N326m revs; & continue to rebuff attempts by the Commission to get them to comply.”

Apparently, the lottery commission and the Association of Food Beverage and Tobacco Employers (AFBTE) have been at loggerheads over what constitutes a lottery and sales promotion.

The NLRC believes that sales promotions which offer cash or gift prices in exchange for participating in a sales promotion are lotteries. The ABTE believes otherwise and has had this matter in court.

It appears though, that this government is not resting on its oars as its agencies continue to wage a regulatory onslaught against Nigerian companies.

2/ As reported some weeks back, Nigeria recorded its first major IPO in about three years after SAHCOL offered for sale 406,074,000 ordinary shares to the investing public, at N4.65 per share. Thus, the company wants to raise about N1.88 billion.

The IPO is in the form of an offer for sale, which means that early investors in the company are diluting for new shareholders to own a part of the company. The company also released its result to help investors better discern.

Between 2013 and 2017, the company has been profitable except for one year (2015). Revenues have topped N4 billion, hitting N4.8b in 2016 and 2017 respectively. It's first quarter result released this year shows a revenue of about N1.3 billion and loss of about N25 million.

Here is our thread on SAHCOL for more information on this IPO.

https://twitter.com/ugodre/status/1065535212493385728

3/ Still on IPOs, regulators in the Nigerian capital market are expectant that the full automation of all the Initial Public Offerings (IPOs) in Nigeria will commence in early 2019.

Sources familiar with the situation confirmed that preparations for the electronic IPOs are currently underway, even as they specifically hinted February as the commencement date.

Electronic IPO (or e-IPO) entails the automation of all new offers in the Nigerian capital market, such that investors can easily subscribe to and purchase new share offerings over the internet.

With this process, every new order for shares, “will be matched and allotted electronically and directly to the investment accounts of the investors at the Central Securities and Clearing System (CSCS)” as well as other centres assigned for clearing purposes.

We believe that Sankore, the company behind the Diamond Bank Ada app, is one of those behind e-IPO.

For some stats, between 1999 and 2017, about 15 Nigerian companies have raked in a total of N319.9 billion in IPOs. Paltry, if you ask me.

4/ The African Development Bank (AfDB) during the week announced that it has approved about $40 million for African economies. In a press statement, the AfDB revealed that the $40 million investment would be ploughed into the African Infrastructure Investment Fund,

with a focus on acquiring positions of significant influence in roads, airports, rail links, bridges, ports, logistics, power generation, utility distribution, as well as telecommunications assets.

So why does this matter? It should matter to you if you own or work for a Private Equity Fund. Recall, we had reported that AfDB approved $15m for equity investment in Verod Capital Growth Fund III, a private equity fund for investments in high growth middle market companies.

5/ The NDIC appeared to have added more fear to investor community worries about the state of the Nigerian financial sector. According to information contained in the annual report of the NDIC, Nigerian banks’ Non-Performing Loans (NPLs) in 2017 was N2.36 trillion.

This represents a 13.46 per cent decrease, compared to N2.08 trillion in 2016. It said that the banking industry was exposed to high credit risk as the asset quality, which is depicted by the NPLs to Total Loans Ratio, further deteriorated from 12.80% in 2016 to 14.84% in 2017.

More worrying was the NPLs to Shareholders’ Fund Ratio which significantly increased from 43.84% in 2016 to 69.21% in 2017. So basically, the number of bad loans as at 2017 was about 69% of total banking sector shareholder funds.

There was, however, a portion of this report that caught our attention. In page 118, it claimed that, “the DMBs earnings performance indicators showed a declining trend of profitability. Profit before tax decreased by 65.90% from ₦440 billion in 2016 to ₦150 billion in 2017.”

GTB alone recorded N200 billion in PBT, so are they suggesting that pre-tax losses from banks yet to release their 2017 results wiped out banking sector profits? One bank comes to mind.

This is @Nairametrics BTU by @BluechipTechNG

6/ The lobbying community got a significant boost after the FG banned the importation of NPK Fertizers into the country. President of (the fertilizer cabal) Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN),

has heaped praises on the Federal Government for placing a total ban on the importation of nitrogen Phosphorous and Potassium (NPK) fertilizers. In a statement released to the public, Thomas Etuh said that the ban will help the country go a long way

in the fight against the importation of poor quality NPK fertilizer blends, boost local capacity and protect the soil from toxic fertilizers imported by unscrupulous business people.

As is typical with cabals, they claimed that the Nigerian Government was already on the verge of saving more than N720 billion in foreign exchange equivalent, and save thousands of jobs.

They claim that the association has more than 20 blending plants spread across the country to produce up to 4 million tons of high-quality NPK fertilizer blends, a figure that surpasses the 1.5 million tons, which is the highest volume ever utilised by Nigerian farmers.

7/ Ecobank was big in the news during the week. The Lomé-based parent company of the Ecobank Group, has announced the successful raising of a $200 million syndicated loan facility.

In the notification, ETI disclosed that the facility was oversubscribed at $268.5 million, with ETI increasing the Deutsche Bank’s mandate as an arranger from $150 million to $200 million.

The bank said that the facility supports ETI’s goal of maintaining a diversified funding base with strong market access. The loan will be due for repayment in November 2019. The bank also launched a new money remittance app called Rapidtransfer.

The app is said to make it easy and cost-effective for Nigerians abroad to send money home to their loved ones in Nigeria. Nairametrics checked out the much-touted app and its game-changing capabilities and to be fair, it looks good. It has a good user interface and

4 different language features including English & French from which users can choose. Users can also decide when & how they want to remit their money. They also have transparent exchange rates. Ecobank however faces stiff competition from other banks that offer similar services.

8/ The Executive Vice Chairman of the NCC, Professor Garba Danbatta, yesterday in Lagos, said that his commission is currently mulling over several possible solutions to the undue competition facing telcos, following the emergence of Over The Top (OTT) service providers.

Following persistent complaints from telcos, the commission is considering possible solutions to the situation. Note that OTTservice providers typically bypass the likes of telecos and broadcast television networks to distribute streaming media content directly to the viewers.

Some examples of OTT providers include IrokoTV, Afrinolly, Netflix, Amazon Web Service, Hulu, etc. According to Danbatta, “I am aware that players in the sector are struggling to innovate and to deploy creative ideas

for remaining relevant in an age when the life cycle of a concept is barely longer than six months. I assure you of the full support of the NCC in this quest. Even as we gather here to ponder individual and collective responses to the disruption by emerging technologies,

new discoveries and inventions are coming out that could diminish the value of investments being made in the telecoms sector. But are we to allow the sector to be forced into inaction because of the pace at which new technologies and systems are emerging?"

As they say, innovate or die!!

9/ Guinness Nigeria Plc, a subsidiary of Diageo Plc, has attributed the6% decline in its net sales during the Q1 2018/2019 financial year, which ended 30th Sep, to increased competition in the value beer segment, that more than offset growth across the rest of the business.

Mr Baker Magunda, Managing Director/Chief Executive Officer, Guinness Nigeria Plc, noted that the company delivered a result that reflected the continued challenges in the operating environment and increased competition in the beer category.

The beer segment has continued to experience stiff competition among the three major players in the country namely, Nigerian Breweries, Diageo-owned Guinness Nigeria Plc, and AB InBev-owned International Breweries.

The year 2011 ushered in a disruption in the beer market, with the arrival of SABMiller and its acquisition of majority shares in International Breweries Plc, makers of Trophy Beer, located in Ilesa, Osun-State.

However, in 2017, AB InBev acquired 72.17% of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company.

Interestingly Guinness remains the biggest in the spirits segment, while other brewers are not ready to enter this market.

We recently published an article on how much they are spending on advertising and promotions.

nairametrics.com/nb-plc-leads-a…

10/ There was a furor from both sides of the political divide after a former Secretary of State for International Development, United Kingdom, Priti Patel, warned investors to be wary about investing in Nigeria.

Patel, writing in a London newspaper, City A.M, alleged that the President Muhammadu Buhari-led administration failed to honour an agreement involving a firm, Process and Industrial Development (P&ID) and the Federal Government.

According to her, the firm had signed a 20-year contract with the government to create a new natural gas development refinery, but the project fell through after the Federal Government reneged on its contractual commitments.

She further alleged that the Nigerian Government promptly cancelled a compensation settlement, and has done its “level best to pretend Nigeria’s obligations to Process and Industrial Development do not exist.”

Of course, the government pushed back, describing her article as a wicked proposition lacking in substance and devoid of merit in empirical evidence established by facts.

Patel, who has been described as a “Thatcherite”, was involved in a controversy last year that had her resign from the British Cabinet. She was accused of meeting with officials of the Israeli government without authorization.

This is @Nairametrics thread BTU by @BluechipTechNG

11/ The Coordinator of Technologies for African Agricultural Transformation (TAAT) project, Krishan Bheenick has disclosed that Nigeria is among other African countries that have been programmed to benefit from a $120m AfDB TAAT agricultural support cash.

This is unrelated to the $40 million promised by the AfDB which we earlier reported. According to Bheenick, the seed fund which will be made available in tranches of $40,000, is meant to support 40,000 farmers in Africa including

Nigeria’s seven major agricultural commodities listed to benefit in the intervention. . Those in the AgroFintech space should not let this opportunity go to waste.

12/ Have you witnessed the menace of Dangote Truck drivers before? Willing to do anything about it? Dangote Group issued a press statement that it is willing to pay thousands of naira to

members of the public who can provide meaningful information that will lead to the arrest of persons illegally using the company’s trucks to transport materials across the country.

In specific terms, the statement which was signed by Dangote Group’s Head of Corporate Communications, Mr Anthony Chiejina, said that its management will pay the sum of N250,000 to any Nigerian who can provide

useful information that will assist law enforcement agents in the apprehension of people masquerading as Dangote truck drivers whilst transporting “illegal goods”.

It’s easy to understand why they will make such a bold move. If you’ve been into the haulage business before, then you know that handling drivers can be one of the most difficult experiences ever.

I hear they can be some of the most diabolical folks out there (that’s if you believe in stuff like that). 🤔

13/ An oil and gas firm, Greenville Oil and Gas Company Limited announced that it commissioned a $500 million (earlier reports said it was $400m) Liquefied Natural Gas (LNG) plant in Port Harcourt, Rivers State.

It said that the newly inaugurated LNG plant will serve electricity generation plants that find it tough to get gas through pipelines.

The Chairman, Greenville LNG, Eddy Broeke, said that the company’s intention to bridge the natural gas supply gap in the energy sector will also promote economic and social development and revive moribund industries across the country.

Broeke confirmed that over $450 million has been invested in the project, adding that the plant currently has a total capacity of 2,250 tonnes of LNG per day, which is about 750 million tonnes per year.

Van Broeke is a Belgian businessman who made money from logistics and bitumen operations. Apparently, he had spent over $300 million of his personal cash actualizing this plant.

14/ Ikeja Hotels Plc, the owner of Sheraton Hotels Ikeja, reported that its major shareholder OMA Investments Limited, acquired an additional stake in the hotel and leisure company from UBA Nominees Limited to become the single largest shareholder in the company.

In a notice to the NSE, Ikeja Hotels noted that OMA Investments acquired additional 279.10 million ordinary shares of 50 kobo each at N2.05 per share in a deal valued at N572 million. Following the transaction,

OMA Investments Limited’s total shareholdings in Ikeja Hotel Plc is now 538,109,194 shares, representing 25.89%. OMA Investments Limited is an investment vehicle belonging to the late publisher of The Guardian, Alex Ibru.

His wife, Maiden Ibru, currently holds control. This company has been in an ownership tussle between two factions of the Ibru Family. One led by Goodie Ibru, who founded the firm, and the other led by Maiden Ibru, whose husband, Alex Ibru, invested in the company.

Goodie stepped down from the board in February last year, citing the need for a new generation of Ibrus to take over the firm. This was despite a court order affirming his position as Chairman. The board was reconstituted and Anthony Idigbe (SAN) was appointed as Chairman.

Goodie is, however, represented by his son, Ufuoma Ibru, while the Maiden Ibru faction is represented by her son Toke Alex-Ibru, and brother, Alex Thomopoulos. Well, they say blood is thicker than water, except that money can melt that thickness.

15/ We have some update on the MTN/CBN saga. CBN Governor, Godwin Emefiele, disclosed in the last MPR that there has been an amicable solution to the dispute. According to Godwin Emefiele, “We are at the verge.

I mean it’s as good as announcing it. At the appropriate time, these would be communicated. There are several issues involved in this matter. These issues were dealt with over the period.

The one that generated the kind of attention that we didn’t think it should generate is the issue of repatriation. Let me say that it is better to be slow in taking some of these decisions so that they are cogent and there is a rationale for the decision.”

One gets the feeling this issue has engulfed Mr. Emefiele and is perhaps beyond his control. You also feel for him considering that he gets to defend this regulatory onslaught every time he has to face the foreign investor community.

16/ 11 Plc, formerly Mobil Oil Nigeria Plc, has announced the recommencement of the sale and marketing of aviation jet fuel (ATK) at the Murtala Mohammed International Airport and General Aviation (GAT – Domestic).

Mobil has been off this market for about 5 years, but the company’s aviation business is being revitalized in the wake of the construction of a new 20 million litre ATK tank, with the laying of new ATK pipelines linking the company’s facility at Apapa with the Apapa Jetty.

17/ So during the week, GTBank launched Habari, a platform for music, shopping, lifestyle content and more. The bank claims that it’s the largest platform in this space.

Habari offers users direct access to the largest catalogue of local and foreign music online, a seamless shopping experience and an exciting way to connect with friends, amongst other features.

According the bank CEO, Segun Agbaje, “By reimagining the role of banking and driving innovation in how we serve customers, we have built a platform that is less about us as a bank and more about our customers and everything they need to enable their lifestyles.”

So what is the deal here? Retail banking is very key to GTB’s strategy, considering that it doesn’t rely on aggressive marketing as such. So by offering tech-enabled services that endear it to younger generations, the bank can retain their loyalty and most importantly, eyeballs.

These guys will remain critical to the future of banking. Also, note that GTBank will be powering transactions on this platform. Pure Ecosystem play here.

18/ Sterling Bank also made the news during the week, as it launched what it termed, an end-to-end blockchain-based commodity trading and financing platform in Nigeria.

The bank CEO, Abubakar Suleiman, said that the platform was developed in partnership with Binkabi and AFEX Commodities Exchange.

He said the platform would decentralise commodity trading in the country and reduce intermediation in trade, while distributing profit more widely across the value chain.

According to him, “By introducing and establishing a viable and efficient agricultural commodities exchange platform and by applying some of the latest scientific storage technologies and providing liquidity, we can help reduce problems and increase margins for farmers.”

Sterling Bank appears to be doubling down on innovative banking products as its segue into growth and snuffing out the pressure of the FUGAZ.

19/ French-owned outdoor advertising company, JCDecaux, has announced plans to provide real-time traffic information, install solar-powered bus shelters and automatic public toilets in Lagos.

JCDecaux CEO, Jean-Charles Decaux, said that the firm aims to provide real-time traffic information to commuters at strategic points across the city of Lagos, which are notorious for heavy traffic.

The company runs that huge ad display board at the Oworonshoki end of third mainland bridge. JCDecaux said that it had entered Nigeria in partnership with private Lagos-based investment and advisory firm,

Grace Lake, targeting a highly fragmented outdoor advertising market estimated to be worth $130 million.

One thing is for sure, real time traffic information will not reduce the traffic congestion Lagosians are currently experiencing. We need more roads and better traffic management systems. Hopefully, the incoming government will get it right once and for all.

That's our thread for the week. Thanks to award-winning @BluechipTechNG for their support. They have been immense to us all year long.

We also thank you, our followers for reading, retweets, and all the comments. We hope you enjoyed this week's thread.

Next month, we shall be bringing to you our compilation of major corporate deals announced in 2018. Hopefully, we will present another Corporate Story.

Thanks once again and till we do this again next Sunday, have a most profitable week ahead.

*End*